And The Winner Is…

The Nielsen Ratings are in.  After bashing television advertising and the Oscars in recent posts it seems only fair to report on how last Sunday’s event fared.  

According to an article in today’s edition of Advertising Age viewership for the Oscars this year was the lowest in 30 years! 

Although small luxury hotels can’t afford television, they needn’t worry.  Continue focusing on romancing your customers, inviting them back, having them spread your message through word-of-mouth and building brand advocates.  It is infinitely more effective than television.  Keep it up!

What do you think?   Safe travels – Madigan Pratt

 

Closing The Loyalty Gap

When travel agents jump on the Customer Relationship bandwagon you know CRM has reached the mainstream.

The cover story in the Jan 14th issue of Travel Weekly is titled, “Closing the Loyalty Gap.”  Some of the more interesting quotes from the article include:

• In the leisure category, a typical agency probably sees repeat business of around 25%
• Lalia Rach, dean of NYU Tisch Center for Hospitality and Tourism said , “To date there has been an absence of recognition of the importance of client retention.  The focus has been new clients, new clients, new clients.”
• Increasingly, agencies appear to be waking up to the benefits of improving client loyalty, starting with the understanding that far more business typically comes from repeat clients than from new ones.

As a small luxury hotel you no doubt have known the importance of building loyal customer relationships for years now.  Your percentage of repeat guests should be significantly higher than the typical travel agent.

Hopefully you are now on to the next level of customer loyalty – creating brand advocates to maximize word-of-mouth advertising.

If you have any questions on the subject, drop me a line.

 

Create More Brand Advocates in 2008

Are you looking for a profitable New Year’s resolution? Why not resolve to create stronger customer relationships and more Brand Advocates for your luxury hotel.

The linkages between relationships on one end and profits on the other are well documented.

• Research from the prestigious consulting firm Bain & Company shows that depending on the industry, when firms retain just 5% more of their best customers, corporate profits can be boosted 25 to 85%
• There are numerous studies reporting that companies lose between 10% and 20% of their customers every year. At the high end, this equates to a 100% customer every five years.
• In the seminal book on the subject, “The Loyalty Effect”, Frederick F. Reichheld informs us that companies with the strongest customer relationships grow at close to twice the industry average and do so more cost effectively.
• In a 2004 McKinsey Report it’s stated that the average business spends $100 to acquire a new customer and only $10 to keep one.

Creating stronger customer relationships and building Brand Advocates offers a bonus – positive Word-of-Mouth. Studies abound showing recommendations from friends and relatives is the most effective advertising a company can have.

Richheld says is best: Customers who show up on the strength of a personal recommendation tend to be of a higher quality – that is, to be more profitable and stay with a business longer – than customers who respond to conquest advertising, sales pitches or price promotions.

So if you would like your luxury hotel to be more profitable in 2008 – resolve to strengthen customer relationships and build more Brand Advocates.